Unlocking Canadian Capital

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Canada should eliminate its capital gains tax to spur economic growth, says a new book Unlocking Canadian Capital: The Case for Capital Gains Tax Reform in Canada written by economist and Institute Senior Fellow Herbert Grubel and published by The Fraser Institute.

The author points out that the capital gains tax raises little revenue. In fact, lower rates are likely to increase revenue in the short run because lower tax rates induce the sale of appreciated assets and bring in more tax payments. There is also strong evidence that lower capital gains tax rates induce higher revenues in the longer run, largely as a result of increased economic growth and the subsequent payment of more personal and corporate income taxes.

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